tv Nightly Business Report PBS June 26, 2013 1:00am-1:31am PDT
this is "nightly business report" with tyler mathisen and isn't susie gharib. brought to you by. >> thestreet.com. multi media tools for an ever changing world, guides and generates income during a period of low interest rates. real money helps you think through ideas with investing and trading stocks. action alerts plus is a charitable trust portfolio that provides trade by trade strategies, online, mobile, social media, wearethestreet.com. fuel prices are jumping and so are mortgage rates and supply tight, what is a buyer to do? >> trapped, imagine being held hostage by your own employees at your own company? that's exactly what is happening to an american businessman in
china. food fight, would you eat food knowing they are made from genetically altered seeds? it's a multi-billion-dollar industry that finds itself in the center of controversy. that and more tonight on "nightly business report" for tuesday, june 25th. good evening everybody i'm bill griffin in for tyler mathisen this evening. american consumers are feeling more confident these days, surprising given the turmoil and uncertainty in the stock market. for the third straight month a closely watched index rose sharply hitting a five-year high. the survey shows people are feeling better about their jobs and financial situations, and that confidence is also showing up in the housing market. sales of new homes rose more than 2% in may to the highest level wean seen since 2008 and home prices jumped a record 12%
in april on an index of 20 cities. the dow rose more than 100 points and the nasdaq 27 and the s and p up 15 today. with that enthusiasm in the housing market, there is concerns. there is shrinking supply of homes on the market and mortgage rates are easing up, too. how all those changes are impacting home buyers. a few months ago this family sold their home in california, and it could not have gone better. >> we listed our home for one weekend and had 20 offers and they ended up offering 20 over asking, so it was great. >> reporter: but the tables have turned on this family of five, who are in a temporary rental. now they are the buyers facing a sudden spike in both home prices and mortgage rates. >> i'm afraid we'll miss the boat. i feel like if we get priced out
of the market in a few months and depending on the mortgage payments, whether we could afford it if the interest rates go up more. >> reporter: mortgage rates are up a full percentage point since may with huge jumps in the past two weeks. this has home prices in the top 20 records, move high since march and april and double digit gains from a year ago. >> we had people calling in tears saying i have to lock in a rate right now. the people on the fence, some of them have stepped back, but some of them jumped off the fence in the other direction and want to buy a home before rates go up further. >> reporter: and sellers have seen it, too. >> it eliminated a couple people who were highly interested in buying, and so there has been a lot of anxiety, i think, associated with it. >> reporter: all the housing numbers, sales, supply and interest is bullish but backward
looking. regular buyers are moving in and relying on mortgages. affordability is good now but unlike the rest of the market, it is falling fast. for "nightly business report" i'm diana olick in washington. until the housing front a y bipartisan group wanting to shut down fannie mae and freddy mark and replace them with another federal resin you arer to back more private money in the event of another housing crisis. republican senator bob porker is one of the sponsors and says there is an ap title to get this done. >> fanny and freddy, the way they were set up with public gains and private losses was not a fair deal for taxpayers. this is a change that keeps liquidity in the market. hopefully, we'll be successful. i do think there is energy here in congress to take this on, and hopefully, we'll do something that certainly moves us away
from the status quo. >> bailing out fanny and freddy cost american taxpayers more than $187 billion. also in washington, the senate is a step closer to a final vote on that comprehensive overhaul of the nation's immigration laws after passing a key hurdle monday evening. a bipartisan majority approved a compromise measure that beeves up border security paving the way for final passage that could come as early as wednesday. john mccain who is voting for final passage of the overhaul, he appealed to business leaders for their support. >> i have heard of a lot of commitments on the business community, whether be high tech or others that frankly, i haven't seen the results of their commitments yet. so, i hope that they will understand how important it is for them to be involved. >> if the bill clears the senate later this week, it's expected to, then it heads to the house where it's expected to face
significant hurdles from conservative lawmakers. the senate also confirming a new secretary of commerce. benny was elected to the post by a 97-1 vote. she's been a long-time supporter and fundraiser for president obama. and a major speech from the president today calling for new legislation to combat climate change, besides expected calls for new knewble energy he revisited the debate over the keystone oil pipeline. more on that. ♪ ♪ >> reporter: under a scorching gun at georgetown unversionty, president obama wants to establish carbon pollution standards for new and existing power plants. >> as a president, as a father, and as an american, i'm here to
say we need to act. [ applause ] >> i refuse to condemn your generations and future generations for a plan beyond fixes. >> reporter: the plan includes making up to $8 billion. he would also direct the department of interior to have wind and solar renewable programs to power more than 6 million homes by 2020 and he said he would only authorize the controversial keystone pipeline if building it generates fewer greenhouse gases than the alternative. but some environmentalest rallying today want more. >> he's taken some baby steps. he's got to take some giant stems. >> reporter: business advocates said the president's plan risks american jobs. the u.s. chamber of come percme says it punishes americans with
fewer jobs and a weakble economy with benefits to the government. >> i have six children, a husband, i need to run my home. i don't want high utility bills. >> reporter: he said critics have been wrong before. >> what you'll hear from special interests and alliies in congres is that this will kill jobs and crush the economy and basically end american free enterprise as we know it, and the reason i know you'll hear those things is because that's what they said every time. >> reporter: tellingly, the president's plan revolves around executive action and those are things he doesn't need approval from a reluctant congress to accomplish. turning to the market focus, we begin with a management shakeup at the world's largest cruise ship company. the ceo or carnival cruise lines is out. micki had been running it for 35 years but will stay on as chairman.
the change after a series of mishaps including carnival ships. also today, carnival reported better than expected earnings but lookings and prices for 2013 are lower than last year. despite all that, a mixed bach of news. carnival shares rose 5 percent to $34.89. walgreens reported earnings that missed analysts, they cited a week economy, decline in customer traffic and non-pharmacy sales. walgreens said it's changing pricing and promotion strategy. the stock closed at $45.22, down almost 6%. barnes & noble reported another quarter of weak results, much worse than wall street expected. sales of nook devices dropped 34% and e books fell 9%. as a result, the company plans to end the manufacturing of it's own tablets in favor of
co-brand devices made by a third party. shares close to $13.61, a drop of almost 17%, bill? a good day for pandora shareholde shareholders. they said the her vis is now available in 100 car models, that doubles the number from a year ago. 2.5 million listers use pandora now. the bored of mens warehouse is offering a few more insights into last week's termination of george zimmer, the face of the company. according to the bored, mr. zimmer wanted to take the company private and raised concerns over the ce o's compensation. the stock was $37.13. sprint and next tell shareholders have approved the $21.6 billion deal. 80% of the shares were vote in favor of the deal.
it ends a drawnout fight for the 30th largest carrier between soft bank and dish. one more hurdle remains, the approval from the fcc expected in july. sprint finished the day fractionally higher at $6.88. yahoo shares surged almost 4% as ceo delivered a strong report card at the company's shareholder meeting today. since the major took over about a year ago, yahoo stock surged 60%. how do shareholders think she's doing and her vision for yahoo? jon fortt has more. >> reporter: it's been quite a year for yahoo and now ceo marissia say -- marissia myer. myer emphasized the idea that better products will bring in more advertisers, who will spend money to reach yahoo customers.
to show yahoo is on the way toward delivering the results, mayer had three product managers take the stage and do demos and offer stats to suggest they are well on their way. >> flicker photo uploads have increased 300% since the service moved the storage. shareholders at the meeting offered positive reviewed. >> they reennear gieszed the company, the products, the demos done were really on -- on target to show that. >> i think the most important thing they are doing is hiring and inspiring talent. >> what do we want? when do we want it? >> now. >> reporter: a group of former walmart employees protested that retailer's treatment of striking workers trying to get a union. >> once you go to the bored meeting, you can say hey, this is what is going on with walmart associates. they are having complaints. let's see what to do.
>> reporter: mayer focused on what yahoo has to do if it wants to grow. rockery said she still has her work cut out. >> for pr she's done a fantastic job, an a. to really move the company forward, it's probably judgment to be reserved. there's been a lot of flashy stuff like acquisitions but blocking and tackling not being done. >> reporter: stocks up better than 60% since mayer took over 11 months ago. for night by business report, i'm jon fortt. still ahead on the program, an american business executive held hostage in china by his own employees. it's a story you don't want to miss. first let's get a check on the international markets today.
as you know, concerns about a credit crunch in china led to a sharp sell off in the store market. they are trying to calm investors. the people's bank of china promises it won't tighten rules too much as it tries to curve private bank lengthing to sure up economic growth. we know about the challenges of doing business in another country, dealing with foreign governments, exchange rates and different regulations, but what about the boss being taken hostage? that's happening to an american in china. >> reporter: it's not often you're a prisoner in your own company but that's happening to chip starnes. the medical ceo has been health
captive since last friday by workers who have been with him for nearly a decade. did you ever think you would be in this situation? >> no, no, absolutely not. >> reporter: he was the center of a worker revolt, not uncommon for china but rare for an american boss. with wages rising, the 42-year-old decided to move part of the business to india. layed off 35 workers and paid severance but rumors he was closing, which he was not. >> severance pay and still had a job and that's the problem. >> reporter: the workers won't let starnes out but would let us no. >> -- in. >> i thought i would have more support. >> reporter: are you going to keep this business in china? >> yes, i was operational seven days ago. >> reporter: the workers say mr. starnes isn't being designed here. he's free to walk around the
grounds but that's very different from being held hostage. not to starnes. >> the first couple days were very, very tough, nothing physical, more mental type of stuff going on. they are around you anywhere you walk, 14, 16, 18 people following you. >> reporter: his lawyers are negotiating, so far, no deal. what's the first thing you'll do when you get out of here? >> i want to take a shower and shave. i'm only 42 but i know i look older than i am. i'm solid gray. >> reporter: held up in the chinese factory. the president of the american chamber of commerce says this type of situations with hostage takes happen on occasion but rare and said this is not a major problem for the international business community. >> think about that, hostage taking happens from time to time. >> imagine it happening in the united states. >> i could not. >> you don't see security
officials there. >> look how much they took it in stride, as well. like don't take this personally. >> is this just like a strike by a union and you go back to work and business as usual? >> i guess. >> crazy. >> to be continued. one of the most well-known law firms in the country layoffs to retain the quote historical profitability. what does this mean for the legal profession? joining us to talk about this, steven harper law professor and author of the lawyer bubble, a profession in crisis. let me just ask you, you know, during the financial crisis we saw wall street firms and big banks scales back, corporate america cutting back and making changes and seems like the legal profession is unscathed until now. is this a short-term problem for one law firm or is -- do you see fund mental changes coming to the profession?
>> i think the answer is both. there are unique things about the firm. over the last few years it benefitted grateful from enormously lucrative bankruptcy matters including laymen brothers for example that allowed it to thrive in various areas of the business, and as those large bankruptcy matters have wound down, they are finding themself -- i don't suspect, it seems clear they are finding themselves with not enough work for them who have to work to do. there is something broader happening in the profession, and that has to do with the evolution of the profession from what, at least, it historically has been a profession as distinct from what it is becoming in the big law segment, which is a collection of short-term profit maximizing businesses. >> yeah, we don't often think of the law industry in profit and loss terms, it's about winning and losing cases, but you made an intriguing point there. there's not as much business. are we less of a society now?
>> no, i don't think so -- >> this is ironic, isn't it in. >> it's predictable. there is tremendous change in technology has made changes in terms of the kinds of things you no longer need lawyers to do. if i can -- if i'm a client and i can have a choice of either running a computer program to separate out documents or paying some associate who is out of law school, 3 or $400 an hour, it's an easy choice. so you have that sort of thing happening, and you also have a different kind on attitude that's set in that has to do with what is happening in terms of how people choose to lead the forms, not uniform or universal. there are firms that are exceptions but the prevailing model is focused on shaort-term thinking and although there's lots of litigation and the society, the demand for high-end
work is actually been flat for the past several years, and in that climate, law firms are trying to essentially buy top-line revenue growth but rating each other's partner. so that creates a further need to make sure you continue to have lots of profits for your firm and your partners, so you can attract that kind of talent. >> steven, you were a practicing an attorney at a firm in chicago for many, many years, i think 30 years and written a critical book about the profession and yet, now you're a law professor. so what do you tell your law students who are aspiring attorneys? choose another line of work? >> yeah, well, the ones i teach in the northeastern trial of advocacy program, there isn't a lot to tell them because they are there. so all i'm doing and been doing for 15 or 20 years is try to help them develop the best possible advocacy skills. the other course at the under
graduate level where students are tracking themselves, it's an advanced seminar. they track themselves into law school but without any real clear notion of why or what it will mean or what the career really will be and, you know, the media i'm gangs from alisha as the good wife, who wouldn't want to lead that life? >> right. >> that frames a lot of expectations of these under graduates. >> you've given us a good picture, snapshot of what is ahead. steven harper. >> thanks for having me on. >> you bet. coming up, genetically altered seeds, a multi-billion-dollar industry but a growing movement to have them banned and what happens next could have wide ranging implications. we'll get to that. but first a look at how stocks, bonds and commodities faired today. the federal reserve and
that's because $1.2 million on route to the bank from switzerland is missing. the fbi along with local officials in new york city and zurik said the money disappeared somewhere between put in the cargo area of a flight that left zurik on saturday and going to jfk. there is something else missing, that's car payments. chance union says that more americans are falling behind on their auto loan payments and it's blaming a rise in some prime borrowers. the company says the late rate is better than it was a year ago at this time. finally tonight, there is a growing food fight over the safety of transparency of genetically modified greens of what we eat. while some genetically altered seeds and plants have been consumed here in the u.s. for years, some banned them. despite increasing demand for more official and drought
resistant crops. more on this controversy. >> reporter: a multi-billion-dollar industry is based on a kernel of controversy. >> we need to do that on wet land. >> reporter: american agriculture demands on genetically modified seeds. for 17 years they allowed farmers to grow more with less saving farmers from last year's drought but some are banned in europe and say it's a growing protest movement in the u.s. >> chemicals and things in your food, we need something else. >> i think it's basic right to know what you put in your mouth and body. >> in all of the years of genetically modified foods, there is no documented case or harm to a human or animal. >> the leaves burn. >> reporter: scientists who work for speed giants are starting to speak out. >> what worries me the most is when we restrict access to
technology or planet preserving. >> reporter: at pioneer, research fellow rene is testing 200 new genetic trades for corn. >> i'm concerned about excessive use of pesticides and fresh water and those are environmental concerns and health concerns around agriculture than the gmo. >> reporter: the biggest player and target is where seeds are a 10 billion-dollar business last year. marchs have been organized against the company. the wheat showed up at a farm in oregon under what the company calls suspicious circumstances, yet the technology officer won the food prize. >> it's time for a new, fresh, conversation around that balancing act between the demand for food and the tools and technologies that we use to meet that demand. >> reporter: but farming and politics don't always mix.
eight countries in europe have banned gmo products but brazil and argentina are embracing them. some are skeptical. several states want to label gmo foods, even though such a law failed in california. it cuts down near conventional tomato tomatoes. >> we spray with round up and using chemicals hasher on the environment and people and want to use safer stuff. >> reporter: if labeling happens and he can't sell his corn, he says he'll have to switch back. for "nightly business report," jane wells, wood land california. that's nig"nightly business report" for tonight. i'm susie gharib. >> always great to have you. have a good evening. >> brought to you by
>> the following kqed production was produced in high definition. [ ♪music ] >> in san josé a new gallery is dedicated to showing only local artists. >> cherri lakey: a lot of these people that work in those corporations are also artists. >> you've undoubtedly heard but did you know that its revival may have started in berkeley? and experimental music pioneer pauline oliveros. >> pauline oliveros: one of my major accomplishments in life was going beyond fear through music. >> this time on spark. [ ♪music ] >> major funding for spark is provided by the william and flora hewlett foundation, supporting creativity and innovation in the arts since 1967. the james irvine foundation, expanding opportunity for the people of california.